Poll: What is your definition of wealthy as defined by Annual Withdrawal Rate?

[travelover]

.........Who knows, I may just go bananas and start to buy all sorts of toys. Once you do that, the sky is the limit.

I keep waiting for you to buy and tear down the house next door so you can install more solar panels.

 

[NW-Bound]

I keep waiting for you to buy and tear down the house next door so you can install more solar panels.

Ah, perhaps it's better for me to find a lot to build a house from scratch like this. The solar array serves as a shade canopy to shield the house from the harsh SW sun.

Or better yet, like this so that I have enough solar juice to charge my future EV.

Notice that even with this huge array, they still have a mini array in front of the house (or perhaps it's the rear?). One can never have enough solar panels.

I would love to see this guy's lithium battery. One megawatthour?

 

[airbornesapper]

Firstly I’m surprised my login worked - secondly… it’s a very relative thing….

No mortgage, cash sitting in the bank doing nothing….original wife of 40 years…

But income from from all sources and no debt in excess of 120k….

I’ll soldier on… Airborne…

 

[eytonxav]

Unfortunately, once you have to take RMDs, annual withdrawal rate is not a very meaningful measure. Mine would be minuscule if not for that.

 

[Alphonse]

I defined it at a Sears tire center when I was in college to buy a tire for my car. I decided that it would be "Being able to buy a set of tires for my car and not having to worry about how to pay for it!" Thank God I achieved that at a fairly young age and have been "wealthy" ever since.

 

[RBDan]

A wealthy person....

- has the financial resources to pursue their passions.
- has the financial resources to weather any unexpected financial burden
- works only on the things he or she is interested in.
- pays for the services they do not like to perform themselves.
- pays for the services that frees up their time.
- lives in a place (places) of their choice.
- can afford socializing with the people they like.
- does not have to sacrifice their personal or ethical standards.

 

[albundyz]

What is wealthy? Being able to live a lifestyle that you choose. For us, it is living in a really nice 55+ neighborhood (just slightly abv avg cost), having a nice car (bot a Lexus coming off a 3 yr lease w/ 17K miles), good friends, happy family, and I can afford to buy Smuckers jam rather than "Great Value" jam. Can buy Coors Light rather than Miller High Life..... cool

 

[Gumby]

Unfortunately, once you have to take RMDs, annual withdrawal rate is not a very meaningful measure. Mine would be minuscule if not for that.

You have to take them. You don't have to spend them (except for the tax).

 

[Exwallstguy]

I feel like the poster wants people to irrationally say they’d be happier being the guy who saved 600k and had a low withdrawal rate than the guy who has 50mm, I’d feel wealthier being the guy w 50mm ��

 

[gooddog]

Wealthy to me is getting wealthier no matter what happens in the economy. Every year the bank account grows fatter. Going to have to put it on a diet.

 

[JJpop]

Wealth is a very personal thing. How you feel about it is going to be based on your life experience. Trying to define it by withdrawal rates is pointless.
Besides, a person with 1000 bucks in savings whose living expenses are 100 pct covered by SS would have a withdrawal rate of 0.

 

[eytonxav]

You have to take them. You don't have to spend them (except for the tax).

Obviously, but for some of us the tax is not trivial when added to SS and pension.

 

[Time2]

Wealthy to me is getting wealthier no matter what happens in the economy. Every year the bank account grows fatter. Going to have to put it on a diet.

Hmm, it seemed I was wealthy until the first week of January or I guess not, as what happened in the economy has made me less wealthy over the last 6 weeks.

 

[teetee]

I defined it at a Sears tire center when I was in college to buy a tire for my car. I decided that it would be "Being able to buy a set of tires for my car and not having to worry about how to pay for it!" Thank God I achieved that at a fairly young age and have been "wealthy" ever since.

One possible situation that example hints is the ability for a good budget or good emergency planning, even for people who are not wealthy per se.

I used to use a similar analogy but instead of a set of tires, my example was "if today you are able to buy a new car with cash, then drive it off the cliff, and then went and get the same new car with cash." But again, anyone with 60k in savings can do it. It is likely not sufficient to describe wealthy people in general sense.

For college students, totally agree with your point.

 

[Gumby]

The first time I ever felt wealthy was the day I walked into the grocery store and bought what I wanted without knowing or caring how much it cost. I was 22, and I sure had a lot less money back then.

 

[I am He]

I have to say I'm kind of blown away that about 1/3 of the early retired and extracting less than 1%.

In my mind, most will take about >$50k equating to at least $5MM. Sure, some might have pensions and SS so they only take $15k out of $1.5MM, but I usually err on the side of conservative.

Knowing consumption in America, I'd bet I'm even underestimating this by half., so kudos to you!

 

[Out-to-Lunch]

I have to say I'm kind of blown away that about 1/3 of the early retired and extracting less than 1%.

In my mind, most will take about >$50k equating to at least $5MM. Sure, some might have pensions and SS so they only take $15k out of $1.5MM, but I usually err on the side of conservative.

Knowing consumption in America, I'd bet I'm even underestimating this by half., so kudos to you!

You made me notice that there are TWO DIFFERENT "titles" for this poll. And they ask two very different things.

I think most of the people were responding to the question "What do you consider wealthy," not the "What is YOUR withdrawal rate."

 

[marko]

Unfortunately, once you have to take RMDs, annual withdrawal rate is not a very meaningful measure. Mine would be minuscule if not for that.

Our RMD is lower than what we withdraw from the IRA each year.

 

[Gumby]

You made me notice that there are TWO DIFFERENT "titles" for this poll. And they ask two very different things....

That is a common failing with polls on this board, and often a source of argument due to mutual misunderstanding.

 

[mickeyd]

I am fortunate to have been born in the USA and have had unlimited opportunities over the last 77 years of my life. I have taken advantage of all of the opportunities that I have recognized. Now I get to rest and enjoy the fruits of my labor. Life is good!

 

[Koolau]

Our family has been wintering in Fort Lauderdale since the 50's; wealth?! It is the land of $50MM homes and $100MM yachts for miles and miles. (not us but it's all nice to look at)

But I've always maintained that a third of what you see here is real wealth, a third is one sleepless night away from bankruptcy and a third are outright thieves with absolutely no intention of paying for any of it. Over the years I've seen it first-hand here.

I think wealth is more a mindset than a number or a W/D rate. Generational wealth perhaps captures it.

Or more like many here where the bills get paid and the money comes in regardless; a level of insulation.

Wealth sits in a First Class seat because it never entered his mind to sit anywhere else; "rich" sits there on miles.

What do you call it when you are "wealthy" enough to sit in FC but choose not to (like me)? Cheap? Foolish? Odd? "Frugal"? Overly "frugal"? I dunno.

 

[Koolau]

Looking at the poll results so far, we appear to be a rather parsimonious crowd. Sorry, Robbie.

RobbieB helps us define the limits and I live vicariously through his BTD adventures. I envy his passion if not the spending. I say "Party on, RobbieB!"

 

[Theophrastus Bombastus]

What do you call it when you are "wealthy" enough to sit in FC but choose not to (like me)? Cheap? Foolish? Odd? "Frugal"? Overly "frugal"? I dunno.

Value oriented!

 

[Bamaman]

Unfortunately, once you have to take RMDs, annual withdrawal rate is not a very meaningful measure. Mine would be minuscule if not for that.

That was exactly what I was thinking about. After 13 1/2 years ER, I've now got to start my RMD's--in what may be a down equities market. Been fortunate to have no withdrawals up until now.

I've got to move funds and pay income taxes on more than I ever made in salary. Say hello to a much higher tax bracket for 2022 and beyond. And I'll have to finally pay some state income tax too.

Too bad my new investment partner, Uncle Sam, is not such a good a steward of my funds as I've been.

 

[Koolau]

I cringe when I see a quote like this. The younger generations hate us because we aren't paying attention to their plight. The unaffordability of decent housing coupled with continuing limited pay while trying to pay off student loans and medical debt is discouraging them from their pursuit of the American dream. Spend a little time on Reddit, especially the antiwork forums, and you'll have a better understanding of the opportunities that you had that don't exist anymore.

Not sure what "opportunities" folks on Reddit think "we" had that they do not have now. I had to work summers for my books/tuition and weekends for spending money when I was in college. I lived at home and commuted. Our kids got grants and loans. We helped pay back the loans. They worked for spending money only, though they too could have worked more to cover their university costs. They also could have lived at home but chose not to.

Parents helped us get into our first home after we rented a real dump for 2 years into working at megacorp/running family business. Our kids were able to afford down payments (with our help - $10K each). I could go on. I think the methods of copping and the various obstacles change, generation to generation, but I don't buy into the "this generation" or "that generation" had it "better" or "worse" - well, maybe the generation like my parents who became adults during the Great Depression. Each generation has to learn how to play the game they are given to play. Some play pretty well and some don't. Most folks can pick a period in their life when they had it "pretty bad." First 10+ years of my life, we had nothing - nothing but just enough food, clothing and shelter. We did alright! End of rant 'cause YMMV.